The price range that I assign to the entry level lake access market has a tendency to change. I’m aware that I do this. Sometimes this price runs to $500k, others to $450k, and yet other times, like today, I call for a swift and decisive cut off at the $400k level. This segment of our market, those homes possessing lake access through an association membership, is a key component of the broader vacation home market at Lake Geneva. Sure it’s nice to see big properties sell for millions of dollars, but by watching the behavior of the entry level market I’d argue a more accurate impression of the overall market would be left.
You know the players in the entry level game: Cedar Point Park, Loch Vista Club, Oakwood Estates, Country Club Estates, Indian Hills, and so on. These associations generally lack any transferable boatslips, though entry level offerings in Indian Hills can, at times, have transferable slips as can homes in Glenwood Springs and Wooddale. If you were a buyer with a top price point of $400k back in 2006, there was essentially no chance that you would be able to purchase a home with a transferable slip. Fast forward to this morning and by my count as many as 5 lake access homes possessing slips may be sold in this sub $400k segment. The home you’ll buy in order to get that slip won’t be too impressive. Paint will peel, appliances may be gold, and square footage will not be benevolent, but if you’re seeking a vacation home that plays like a cottage with a beautiful Geneva boatslip, you have options.
There are 36 entry level lake access homes available on the MLS this morning. Those 36 offerings are varied, and some provide an opportunity to get close to the lake (10 Liechty), while others offer that elusive slip (3 Geneva Lane), and yet others offer loads and loads of square footage (104 Montague). When I view these offerings with my own keen eye, I see blatant value in several of these. The Loch Vista Club has at least one remarkably affordable listing, and I expect that home to sell this week or the next, if it hasn’t already. There are other properties that will sell cheap, including my listing in the Harvard Club now priced at $429k. Anyone interested in a 3 bedroom cottage with lakeview, slip, and membership in the most idyllic old school association on Geneva Lake? Me too.
In a sad development, I just reviewed the “36” lake access homes that I told you about. It seems that two of these listings do not actually possess private lakerights. And so it goes, the ridiculous representation of properties that lack lakerights as though they are properties that indeed have them. This unfortunate situation is why it’s even more important that you work with me. I wonder if buyers actually look at these listings on print outs and online and believe that they have found some sort of rare offering, available for their viewing only, an undiscovered gem that has secret lakerights that only they know about. Curious if the listing you’re interested in actually has private lake access? Just ask me, please.
But I’m getting far ahead of myself, and this is more about the activity in the entry level market than it is the inventory. There have been 17 YTD sales in this sub $400k segment, and another 4 are pending sale today. For some context in which to view this robust number consider that there were just 13 YTD sales for 2010, and a mere 9 YTD in 2009. You’d have to go all the way back to the hay day of 2006 to find a YTD number that rivals our 2011 figure, and even 2006 only registered 18 such sales during the same time frame. It looks like the entry level market is going to have a banner year, and that gives me more hope for a slowly recovering market than you might imagine.
The biggest myth over recent years is that everyone either is going broke or has already gone broke. This is refuted by the solid sales activity at the upper reaches of our lakefront market, but it’s even more thoroughly debunked by the return of the entry level lake access buyer this year. This sub $400k buyer is more affected by swings in the stock markets, by unemployment statistics, and by consumer confidence levels. If this buyer isn’t confident, this buyer just won’t buy a vacation home. It’s pretty simple really. A confident buyer buys, while a worried buyer shrinks back to his suburban home and checks her online bank statements daily, no, hourly. The 2011 activity shows that this buyer has returned in significant numbers, and the entry level market has been a direct and thankful beneficiary.
There is still work to be done. The market will need to finish the year on a positive note to retain any semblance of momentum into 2012. Barring any catastrophic economic events, and assuming that the GOP can continually beat back the Pelosi, Reed, and Obama agenda that seeks to tax us all into mediocrity, the year should end well, and 2011 should go on record as being the best year for our entry level market since the peak year of 2006. In the face of this momentum there is still opportunity. List prices are soft and sellers remain motivated in spite of the increased activity. If you’re a buyer in this segment, I know of a very sweaty Realtor who would love to help.